The 5% deposit scheme was for citizens. Labor's now guaranteeing loans for 51,000 non citizens

Australian taxpayers are now guaranteeing home loans for 51,000 people who aren't citizens, and the Albanese government is spending millions advertising the deal in Mandarin and Arabic while young Australians stay locked out of the housing market.

The 5% deposit scheme lets a first home buyer in with a deposit as low as 5% and puts the taxpayer on the hook as guarantor. Sky News aired one of the ads on Tuesday night, a government spot pushing the scheme, signed off with the line "authorised by the Australian government, Canberra".

Only Australian citizens and permanent residents can use it, so nobody's breaking the rules. But with young Australians priced out of the market and non citizens already 51,000 deep, One Nation and the Coalition say a taxpayer funded scheme advertised in foreign languages shows exactly where Labor's priorities sit. Labor says the ads just follow standard government guidelines.

James Macpherson aired the Mandarin ad and asked how it helps young Aussies

Sky News host James Macpherson played the government ad on Tuesday, then played it straight.

"So help me understand how promoting a taxpayer backed home ownership scheme to foreigners, in foreign languages, helps young Aussies."

Macpherson said a matching ad spruiking the same scheme had been produced in Arabic. His panel called the campaign tone deaf, and one panellist said that if they'd seen the ad during an election, their first instinct would've been that it was a hoax planted to embarrass the government. It wasn't. It was authorised by Canberra.

Andrew Bragg told Senate estimates the 51,000 users are "not Australians"

The ads land weeks after a testy Senate estimates hearing, where the figure of 51,000 non citizens using the scheme first emerged. Shadow Housing Minister Andrew Bragg pressed Labor's Tim Ayres on why a scheme built for Australian first home buyers had been opened to people who aren't citizens.

"It's the Australian First Home Buyers Scheme. It's not for people who are not Australians," Bragg told the hearing.

Ayres made no apology for the 2023 expansion, arguing permanent residents have settled here for good.

"Many of them are in our suburbs, in families where they are grandparents, taxpayers, in our defence forces. They are part of the Australian community," he said.

Bragg also went after the cost. He told the hearing Treasury's total marketing spend on the 5% deposit and Help to Buy schemes had reached almost $7 million as of 30 April, and that the campaign was impossible to miss. "It's like I see more 5% deposit marketing than I do for KFC these days," he said.

A permanent resident is not a citizen, and both can now get the loan

The scheme lets a first home buyer buy with a deposit as low as 5%, and the government goes guarantor for the rest so the buyer skips lenders mortgage insurance. If the buyer defaults, the taxpayer pays. It started in 2020 and has helped more than 300,000 people into a home.

It used to be for Australian citizens. Since July 2023 permanent residents can get it as well, and more than 51,000 of them have. From 1 October 2025 Labor dropped the income limits, lifted the price caps and made the places unlimited, so the taxpayer is now backing loans with no cap on how many.

A permanent resident is not an Australian citizen. They live here, but they're still a citizen of another country and travel on another country's passport. They can't vote. They can be deported. Many are eligible to become citizens and haven't done it. A citizen has made the pledge, can vote and can never be thrown out. Both can now walk into a bank with a 5% deposit and have the taxpayer guarantee the rest.

That's the whole argument. 51,000 people using a taxpayer backed scheme are not citizens, every place they take is one less for a young Australian born here who still can't buy, and Labor spent millions advertising it in Mandarin and Arabic.

Clare O'Neil says the ads follow protocol, Hal Pawson says Mandarin speakers aren't foreigners

A spokesperson for Housing Minister Clare O'Neil said the campaign was by the book. "There are guidelines for government information campaigns to follow. This includes running them in languages other than English, and housing is no different," the spokesperson said, adding that only citizens and permanent residents are eligible.

Emeritus Professor Hal Pawson of UNSW took aim at the assumption that Mandarin or Arabic speakers must be foreigners. He said the scheme is only open to citizens or permanent residents, "so I can't see what would be the logic in pitching the scheme to foreigners", and suggested Housing Australia was chasing every eligible applicant it could to lift the take up numbers.

Pauline Hanson wants foreign owners given two years to sell or lose the house

For One Nation, the ads are a gift. Banning foreign ownership of residential property has been party policy for years, and leader Pauline Hanson has kept hammering it.

"Foreigners who aren't Australian citizens shouldn't own Australian homes," Hanson wrote on X.

One Nation would ban foreign ownership of residential property outright, give existing foreign owners two years to sell, and repossess anything left unsold. It would also bar international students and temporary visa holders from buying in the first place. The party's spokesperson said promoting a housing scheme "to foreigners in foreign languages does not help Australians secure affordable accommodation".

The backdrop helps One Nation's case. Chinese nationals own 67% of the more than 40,000 residential properties on the ATO's foreign ownership register, and Labor's temporary ban on foreigners buying established homes now runs out to 2027.

Angus Taylor would lock the scheme to citizens, a policy One Nation wrote first

Liberal leader Angus Taylor says he was "appalled" that so many non citizens accessed the scheme and has vowed a Coalition government would close it to "anyone but Australian citizens". It's a familiar pattern. The Coalition keeps reaching for lines One Nation ran first, as Hanson's party climbs in the polls.

For now the scheme stays open to permanent residents, the ads stay in Mandarin and Arabic, and the government's own housing target keeps slipping. Labor promised 1.2 million new homes by 2029, and it's already running well behind. The advertising, at least, is arriving on time.